Rupee appreciation has hit the pharma industry as exports for the financial year 2007-08 are estimated to rise a moderate 7 per cent against the targetted 30 per cent growth. While the volumes may have gone up manifold, the concern of a dip in pharma exports in value terms is rising. Besides rupee appreciation, the dent in exports due to pricing pressure in the US, where a lot of products have gone off patent recently, also affected the exports.
"In FY07, the pharma exports were close to Rs 25,000 crore (Rs 250 billion) and in FY08, they would be about Rs 27,000 crore (Rs 270 billion)," said a top official from the Pharmaceutical Exports Promotion Council (Pharmexcil), set up by the ministry of commerce and industry.
Last year, pharmaceutical exports stood at $5.5 billion, according to Commercial Intelligence and Statistics (India) figures as against total exports of $125 billion, contributing around 5 per cent.
"The recession has also forced companies to offer high discounts in the US, which is the largest overseas market for India. The returns of the firms who are into value-added products are also affected," said Sunil Parekh, advisor to Crisil Solutions.
"The appreciation in the rupee is the main reason for the lower realisation this year," said Kamlesh Udani, executive director, JB Chemicals.
"Price cuts in the US have been as high as 65 per cent depending on the value and number of players involved in a particular generic drug," said an Aurobindo Pharma official.
Aurobindo Pharma's exports contributed 63 per cent to its overall sales last year, The overseas sales accounted for about 62 per cent of the total sales this year.
Its overall sales rose to $ 640 million in FY08 from $500 million last year.
Despite a 20 per cent increase in exports in dollars terms, in rupee terms, they grew only 10 per cent.
